Which 2008 U.S. government program bought troubled financial assets during the global market crash?

The Troubled Asset Relief Program bought troubled financial assets during the global market crash of 2008.

Congress authorized TARP through the Emergency Economic Stabilization Act, signed on 3 October 2008. The program was initially given authority to purchase or insure up to $700 billion in troubled assets, especially mortgage-related securities whose uncertain value had weakened financial institutions.

In practice, much of TARP’s early support used capital injections and other investments rather than simply purchasing mortgage securities. The Treasury invested in banks and other firms to stabilize the financial system and help restore lending. Several automobile companies also received assistance through related TARP actions.

TARP is often confused with the Federal Reserve’s emergency lending programs or with the 2009 American Recovery and Reinvestment Act. Those were different measures. TARP was a financial-rescue program created during the crisis, and many of its investments were later repaid, although the program also produced losses in some areas.